The question in the case, Chief Justice Roberts wrote, turned on the scope of the language of the Clean Air Act.
Under it, he wrote, Congress had not clearly given the agency sweeping authority to regulate the energy industry.
"Capping carbon dioxide emissions at a level that will force a nationwide transition away from the use of coal to generate electricity may be a sensible ‘solution to the crisis of the day,'" he wrote, quoting an earlier decision.
But, he added, "a decision of such magnitude and consequence rests with Congress itself, or an agency acting pursuant to a clear delegation from that representative body."
In dissent, Justice Kagan wrote that the court had substituted its own policy judgment for that of Congress.
"Whatever else this court may know about, it does not have a clue about how to address climate change," she wrote.
"And let's say the obvious: The stakes here are high. Yet the court today prevents congressionally authorized agency action to curb power plants' carbon dioxide emissions."
"The court appoints itself -- instead of Congress or the expert agency -- the decision maker on climate policy," she wrote. "I cannot think of many things more frightening."
The ruling curtailed but did not eliminate the agency's ability to regulate the energy sector, and the agency may still use measures like emission controls at individual power plants. But the court ruled out more ambitious approaches, like a cap-and-trade system.
It has also expressed skepticism toward the reach of other regulatory agencies, evident in recent decisions arising from the coronavirus pandemic.
The court has ruled, for instance, that the Centers for Disease Control and Prevention was not authorized to impose a moratorium on evictions and that the Occupational Safety and Health Administration was powerless to tell large employers to have their workers vaccinated or undergo frequent testing.
The question before the justices in the new case, West Virginia v. Environmental Protection Agency, No. 20-1530, was whether the Clean Air Act allowed the E.P.A. to issue sweeping regulations across the power sector.